Author Topic: Energy firms profitability rises to £125 per customer  (Read 2727 times)

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The Prophet

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Energy firms profitability rises to £125 per customer
« on: October 15, 2011, 11:15:53 am »
Figures from energy regulator Ofgem, show that the 'Big Six' energy companies profits have soared.
The profit has risen to £125 per customer per year up from £15 in June. The energy suppliers say this is misleading as they claim it is a snapshot of the profit they would make from dual-fuel customers, if energy prices remain unchanged for the next twelve months.

On rising bills, Christine McGourty, director of Energy UK, which represents energy suppliers said in response to Ofgem. "A snapshot of profits every few months does not provide a realistic picture of the average profits over a year of companies in the sector. It is the rising cost of wholesale energy that has contributed to the increase in customers' bills this year." She also said, "Ofgem data published yesterday shows that we have a very competitive market."

Since June, the profit margin has risen because the providers have raised prices by more than the increase in wholesale energy costs. Ofgem predicts that energy firms' profit margins will fall to about £90 per customer next year if wholesale energy prices rise further.

SSE estimates its profit margin at £64 per customer.
British Gas claims it made just £24 per dual-fuel customer after tax.

However, Ofgem said that the energy suppliers were "comparing apples with pears" and expressed concern about the accounts used by the suppliers for their own profit figures.

Ofgem has also published a simplification plan under which energy suppliers would be forced to have simple no-frills tariffs.  These would consist of a standing charge fixed by the regulator plus a unit charge for the energy used.

Tim Yeo MP, chair of the Energy and Climate Change Committee said "that the rise in profit margins to a three-year-high is evidence of absolutely crass behaviour by the energy companies, with a jump in prices announced in the last few months ahead of what will be a winter in which most families face their highest ever electricity and gas bills"

The regulator will publish its detailed proposals for consultation next month and hopes to have implemented some of its reforms by winter 2012.

The average dual-fuel bill is now £1,345 a year following the recent price rises from all the big suppliers.

Ofgem's chief executive Alistair Buchanan said, "When consumers face energy bills at around £1,345 they must have complete confidence that this price is set by companies competing in a fully competitive market. At the moment that is not the case."


Philofacts

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Re: Energy firms profitability rises to £125 per customer
« Reply #1 on: March 26, 2012, 10:21:52 am »
According to research by Liberum Capital, energy bills could increase by 70%  by 2020.
The average household bill could be as much as £2,200.

The number of people in fuel poverty, those paying more than 10% of their income for energy, is expected to rise from 5 million to 8 million in the next four years.
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